Question 5 of 30 An investor wrote a naked call option. The premium was Rs. 2.50 per share and the market price and the exercise price of the same are Rs. 37 and Rs. 41 respectively is the amount that is required to be deposited with the clearing house (the contract is for 100 shraes) O Rs. 590 Rs 620 ORs. 680 TS 600

Question 5 of 30 An investor wrote a naked call option. The premium was Rs. 2.50 per share and the market price and the exercise price of the same are Rs. 37 and Rs. 41 respectively is the amount that is required to be deposited with the clearing house (the contract is for 100 shraes) O Rs. 590 Rs 620 ORs. 680 TS 600

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ay 2. Gains and losses are recognized daily IMR = $2,530, MMR = $2,300, for a T-Bond futures $100,000. Suppose you buy one June contract at the open of $98,500, Monday’s settle price is 98’10, and Tuesday’s close is 97’00. What is in your margin call in Tuesday’s settle?
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Question 4 Suppose that the current price of USD/TL rate is 7.18. AL Borsa Istanbul there is USD futures contract with maturity June 30th. 2021. Suppose the discount rate fram today to June is 0.95. Suppose that the contractis traded at fair price. Each contract is for 1000 USD and needs 400 TL initial margin and 300 TL maintenance margin in the account. Suppose expecting USD rate will rise you bought 5 long contracts. (Answer the following to 2 decimal digits.) What is the initial price of the future contract - USD/TRY. What is the initial amount of margin account needed- TL If the USD rate falls to 7.14 next month and the discount factor becomes 0.96 what is your profit/loss: TL (write negative number for loss) TL What is the remaining amount on margin account? will there be a margin call? ves/No)
Question 2 Let 5-532,0-30%,r-65%, and 6-1% (continuously compounded). Compute the Black-Scholes price for a $35-strike European put option with 9 months until expiration Selected Answe Answers $4.02 $4.02 $2.63 $5.6) Od 34:21 11.00
6- A put option (with shares as the underlying asset) was originally purchased for $1.44 and is now trading for $2.82. The exercise price is $34 and the underlying share is currently trading for $31.64. What is the intrinsic value of the option? a. $2.82 b. $0.00 c. $2.36 d. $1.44
Contract Name Last Trade Date Last Price Bid Ask Change % Change Volume Open Interest Implied Volatility AAPL200417C00105000 (Links to an external site.) 2019-11-19 3:53PM EST 105.00 (Links to an external site.) 160.65 160.75 165.40 0.00 - 20 100 78.61% 7. Is this contract a call or a put option? 8. How much do you need to pay to buy this option contract? Hint: when you buy the contract, you need to use Ask price.
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Straddle problem Given a stock with a current strike price of $25 and the following information; Write 1 ABC September 25 Calls @ 1Write 1 ABC September 25 puts @ 3 What is the total premium paid? (assume 1 contract = 100 shares) What is the maximum investor return? What is the maximum investor loss? Why do investors use straddles? If an investor buys a derivative position, are they long or short?
Q.7 A stock XYZ Ltd. is trading at Rs. 650. Mr. Lalit is bullish on the stock but does not want to invest Rs. 650. He does a Long Combo. He sells a Put option with a strike price of Rs. 600 at a premium of Rs. 50.00 and buys a Call Option with a strike price of Rs. 700 at a premium of Rs. 45. Prepare a pay-off table by taking different closing of XYZ Itd. stock and present his profit or loss graphically. Also, discuss the Break even points of the strategy.
QUESTION 30 Johnson & Johnson (ticker:JNJ) is traded at $172.21 per share when Nancy sold a call option today. The call premium is $3.05 and the exercise price is $180 The option will be expired on Jan. 20, 2024. a. What is Nancy's expectation about JNJ's price between now and expiration date? Also, state reasons why sellling a call is beneficial given her expectation of the price movement. b. What are Nancy's maximum profit and maximum loss? c. Show the profit/loss if, at the expiration date, the JNJ price is (1) $150, (2) $182, (3) $190. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph ABC ✔ ✓ Π "Ω Θ Arial 田く HH = 10pt 田田田 Ev A V 田旺图 † {} Ix ४ Gô Ky Q5 + ≡≡≡≡ € € X² X₂ & >IT
6. An investor took a long position on an American style call option on Tesla in June with an expiration date at the end of December in the same year. The premium is 38$/contract and the strike price is 1030$/share. One contract is 100 shares. Following the purchase, the price rose and in August the investor decided to exercise the option before the expiration date. How much did the investor with the short position in this option lose/win if the price of Tesla was in August 1073$/share? Draw the payoff diagram.

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